How to Record Returned/Bounced Check in QuickBooks?

In your QuickBooks account, you have received a check but it got bounced so now you want to know how […]

In your QuickBooks account, you have received a check but it got bounced so now you want to know how to handle this. Here, is the article that is all about how to record bounced checks in QuickBooks.

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Here are the ways to record the checks that got bounced. So you decide using which way you want to record it into your books. You just go with one of the processes and follow the detailed steps to get it done easily into your QuickBooks account.

In this article:

What is a Returned Check in QuickBooks?

A returned check is often one that a bank declines to cash because there aren’t sufficient funds in the check writer’s account to cover the full amount of the payment. This circumstance is sometimes referred to as a bounced check, although the bank refers to it as nonsufficient funds or NSF.

What Are The Basics of a Returned Check?

Checks are processed electronically by businesses and banks, and customers can even deposit checks using their smartphones. However, what used to work could not operate today and could lead to a returned check that you will then need to re-deposit. These are checks that the bank of the check writer cannot process, denies, and sends back to the bank that requested payment of the check. Checks that are returned for various reasons could be:

  • Stop Payments: A returned check might also be the result of a request to not pay a check that has already been issued.
  • Insufficient Funds: When a non-sufficient funds (NSF) check is issued by the sender-i.e., one for which the recipient does not have enough money in their account to cover it and the check may bounce.
  • Improperly Written: If the sender fails to sign it then the check can be returned.
  • Check too Old to Honor: If a check was cashed more than six months after the check’s issue date, a bank may consider the check to be uncollectible.

When Might a Check Bounce?

A check can bounce if there are not sufficient funds in your checking account to cover it. An expected deposit might not have reached your account in time, or you might have forgotten that you arranged an automatic payment.

A check could be returned for other reasons. If you post-date a check, instruct the bank to suspend payment, or the recipient tries to deposit it months after the date indicated on the front, the financial institution may return the payment. Additionally, the bank may also reject the check if it is missing any essential details, such as a signature. Some people might purposefully write a check even though they are aware that their account is insufficiently funded to cover it. State law generally prohibits this.

What Are The Consequences of Having a Check Returned?

Whether you meant to write a bad check or not, it might be problematic to have one returned. These are a few of the issues you might run into.

  • Bank Penalties and Consequences: Even if it causes your balance to fall below zero, your bank has the right to charge nonsufficient funds (NSF) fees and deduct them immediately from your account. NSF fees differ by the bank, but according to a Bank rate survey, the typical amount is about $33. The possibility of the bank closing your account increases the likelihood that you won’t be able to join another bank or credit union.
  • Charges from Check Recipient: Additionally, the business or person who received the check will probably charge you a returned check fee. According to payment processing firm VeriCheck, the recipient may charge you anywhere between $20 and $50 or a percentage of the check amount, depending on the state. Other actions, like suspending a service, are also possible from the payee.
  • Legal Penalties: Also, you can run into legal issues. Writing a check on purpose without having the funds in your account is punishable in various places as either a misdemeanor or a felony. Local laws and circumstances, such as the sum of the check and whether you ultimately paid the money as agreed upon, will determine the specifics.
  • Negative Banking History: Financial institutions often do not report returned checks to major credit reporting agencies. However, they might inform specialized reporting organizations like Early Warning Services and ChexSystems about returned checks. These agencies are experts at information verification. If you have a poor history with these organizations, it can be more difficult for you to get a bank account in the future.
  • Potential Credit Hit: Checks that bounce are often not reported by financial institutions to credit bureaus like Equifax, Experian, and TransUnion. However, the payee might. For example, if the check was for a loan payment, the lender may treat it as nonpayment and might later notify the credit bureaus of the missed or late payment. Your credit scores could be lowered by the unfavorable material on your credit reports.

How to Enter Returned or Bounced Checks in QuickBooks?

Enter Bounced Checks in QuickBooks

In QuickBooks Desktop you get the option for recording the bounced check that was received as the payment. You have received it in your sales receipts or invoices from customers. QuickBooks tags the invoice and the Unpaid and then allows you to enter the fees charged by the Bank for the bounced check. For this, QuickBooks create a new invoice for the Non-sufficient Funds (NSF) fee that is charged by the bank. You have to send it back to the customer with the bounced check. Here are the steps to t enter the bounced check in QuickBooks:

  • In the Windows system, Open the QuickBooks Software.
  • Click on the Customer Menu from the top of the window.
  • From Customer drop-down options, Select the option Receive Payment.
  • The new Window opens-up.
  • In this, You have to locate and then select the Customer Payment that is canceled because of a Returned or Bounced Check.
  • The new window of Receive Payment opens up on your screen.
  • You have to click on the option Record Returned or Bounced Check that is at the top right side of the window.
  • Managed Returned or Bounced Check window opens up.
  • In this window, Mention the Fee that is Charged by the Bank for a Bounced Checks and the date in the adjacent column.
  • Click on the Expense Account from the menu options where you have Charged the NSF from the bank.
  • Choose Class if you have enabled the QuickBooks Class tracking.
  • Now, In the late Customer Fee, mention the Amount to be Charged from the customer for the bounced check.
  • Review it carefully and then click on the next button to continue.
  • It opens the Bounced Check Summary Window and shows you what happen when you Record Returned or Bounced check.
  • You have to note down the Transactions that are marked as Unpaid from the QuickBooks.
  • Then review it for the final time.
  • After that, click on the Finish button.

What Are the Various Scenarios Associated with Check Bouncing and Methods to Solve it?

The different scenarios and methods to tackle check bouncing have been highlighted below.

Case 1: Bank Covered the Bounced Check and Assessed You a Fee

If this happens, then you should follow the steps below:

  • Choose + New.
  • Choose Expense.
  • Go to the drop-down menu for Payee:
    • If the bank charged the vendor, choose them.
    • If your account was charged, choose the bank.
  • Choose the account you use to pay expenditures from the Payment account dropdown menu.
  • Put “NSF fee” in the field for the reference number to set it apart from other costs.
  • Choose Bank Charges from the Category column.
  • Enter the sum that was charged to Your Account.
  • Choose Save.

Case 2: The Vendor Returned the Check without Depositing It after Your Check Bounced and Your Bank Refused to Pay for It

In this scenario, you should stick to the steps highlighted below.

  • Click Get paid & pay, then choose Vendors (Take me there).
  • Choose the vendor you paid.
  • Locate the Bounced Check, then Choose it.
  • From the pop-up menu, Click More, then Void.
  • Select OK after making sure you want to cancel the check.

Case 3: Your Bank Refused to Reimburse the Returned Check, And the Vendor Keeps Re-Depositing It

As a result, there are several check bounces, reversals, and bank costs associated with the check.

Probability 1: Bank Keeps Track of Every Bounce and Reversals

1st Step: Reverse the Payment from the Bounced Check by making a Journal Entry.

  • Choose + New.
  • Choosing Journal Entry
  • In the Journal Date column, type the day the check bounced.
  • Choose the bank account on the first line from the Account column’s dropdown menu.
  • In the Debits column, enter the check’s amount.
  • Choose Accounts Payable from the dropdown menu in the Account column on the second line. The amount of the check appears.
  • Pick the vendor from the Name column.
  • Enter a note explaining the motivation behind the journal entry in the Memo area.
  • Choose Save.

2nd Step: Reopen the Invoice and Connect the Failed Check to the Entry in the Journal.

  • Click Get paid & pay, then choose Vendors (Take me there).
  • Look up and choose the vendor’s name.
  • Find the bounced check in the Transaction List and click on it.
  • Select the Journal Entry checkbox after clearing the one for the bill.
  • Select Save after making sure you want to make the changes.

3rd Step: Take Note of the Bank Fee.

  • Choose + New.
  • Choose Expense.
  • Go to the drop-down menu for Payee:
  • If the bank charged the merchant, choose them.

If your account was charged, choose the bank.

Choose the account you use to pay expenditures from the Payment account dropdown menu.

  • Put “NSF fee” in the field for the reference number to set it apart from other costs.
  • Choose Bank Charges from the Category column.
  • Enter the sum that was charged to your account.
  • Choose Save.

4th Step: For Every Bounce, You have to Repeat steps 1 to 3.

When you have enough money in your bank account to cover the check payment, you should record the bill payment.

Probability 2: The Bank Keeps Track of Successful Payments Only

1st Step: Put the day the payment was processed in place of the payment date.

  • Click Get paid & pay, then choose Vendors (Take me there).
  • Look up and choose the vendor’s name.
  • Find the bounced check in the Transaction List and click on it.
  • Modify the due date.
  • Select Save after making sure you want to make the changes.

2nd Step: Follow Step 3 of the previous section (Probability 1)

Hopefully, the article has cleared up all your doubts related to entering non-sufficient funds in QuickBooks. We have covered all the possible scenarios that may crop up and have showcased the steps.

How to Enter a Returned or Bounced Check in QuickBooks Online Using Journal Entry?

This is one of the methods to record an NSF check in the QuickBooks Online using the Journal Entry. You have to create the Journal Entry first that represents the non-payment amount. After that, delete the original invoice that was created for the customer.

Bounced Checks in QuickBooks Online

Create the service item for bounced checks and the fees. Using this you can add them to the invoice that you can later send to your customer. So do create 2 items one for the fee from the bank and the other for the charges you want to collect from your customer for this bounced check fee.

The steps to create items are as follows:

  • In QuickBooks, Click on the Gear icon.
  • Then from the List shown.
  • Choose Products and Services option.
  • Click on the New and then Select the Service option.
  • You have to name the item as Bounced Check Fees.
  • In the Income Account, click on the drop-down arrow.
  • Choose the Account to Track the bounced check.
  • Click on the button Save and close and you are done with Creating an Item.

How to Record Returned or Bounced Check in QuickBooks using Journal Entry

Follow the steps to record bounced check using journal entry:

Step 1: Create a Journal Entry

  • In QuickBooks Navigation Panel.
  • Click on the + Sign that is New button.
  • Then select the other section.
  • After that, Click on the Journal Entry.
  • Mention the Date of Bounced Check by bank in the Journal Date field.
  • In the first line of the account, Click on the Account Receivable (A/R).
  • Mention the Amount that was mentioned on the bounced check in the Debit column.
  • Then mention the Name of the Customer in the name field.
  • Go to the Second line, Click on the Bank Account in which the check was Bounced.
  • The Credit Amount is going to be auto-fill in the column.
  • In the Description field, You have to write down the Brief Description of the check that is bounced.
  • Then click on the Save the Entry to Save it properly.

After this, you have to delete the original invoice and then attach the bounced check with the journal entry that you just created.

Step 2: Remove the original Invoice and then Link the Bounced Check

  • In QuickBooks, Go to the Left-side menu.
  • From the menu, click on the Sales or Invoicing.
  • The New Window opens-up.
  • In this, Click on the Customer tab.
  • Then select the Customer who issues the Bounced Check from your transactions list.
  • You have to Remove the Tick Mark from the invoice to which the Bounced Check was applied.
  • Then select the Journal Entry to attach with that Invoice.
  • In the end, Click on the Save and then close the window.

Step 3: Enter the Bank Service Fee for a Bounced Check

  • Click on the New button.
  • In the Vendors, click on the option Expenses.
  • Go to the Payee field.
  • Mention the name of your Financial Institution.
  • In the Payment Date field, Enter the date on which the Check is Bounced.
  • Mention the NSF Fees in the field of Ref No.
  • In the first line, click on Category and select option Bank Charges Expense account.
  • Go to the Amount column.
  • Mention the amount that the Bank Charged for the Bounced Check.
  • After that, Click on the Save Button to save these Changes.

Step 4: Create the Invoice for the Bank Service Fee

  • Click on the + Sign that means New.
  • In the Customers option.
  • Select the Invoice.
  • After that, Choose the Name of the customer.
  • Enter the Date in the Invoice date field. This date is when the Check was Bounced.
  • Go to the Product and Services column.
  • From further options, select the Bounced Check Fee item that you have created.
  • Mention the Amount of Bounced check.
  • Click on the Save and Close button.

Step 5: Then Print the Statement to Send it to the Customer

Print the statement by mentioning its type of statement, and with start and end date. Click on the print to make its copy. After making the copy, you have to send it to the Customer for receiving the payment.

Step 6: Receive the Payment of the Customer for the New Invoice

When you receive the payment from your customer who issued the bounced check. Make the new account for it under Receive payment that shows the date and type of the payment. In this, you also mentioned the deposit done in the account and the amount you received.

How to Record a Returned or Bounced Check in QuickBooks Online using Write Checks?

To return a check into QuickBooks Online is different from the desktop version. So here are the steps in detail that help you to record a bounced checks in QuickBooks Online using write checks. The steps are as follows:

Step 1: Write the Check to Record the Amount Decreased in the Bank Account

  • In QuickBooks Online, go to the left side menu.
  • Click on the New button shown as the + sign.
  • Go to the Vendors column and then click on the Check option.
  • The new window opens up with Write Check name.
  • In this window, you have to fill the following fields.
    • Payee
    • Description
    • Account Details
    • Payment Date
    • Bank Account
    • Amount
    • Memo
  • Then click on Save and Close button.

Step 2: Create a new Service item for the Bounced Check and the NSF Fees

  • In QuickBooks, Click on the Gear icon at the top.
  • Then in the List Column, choose Product and Services.
  • Now, click on the New button to create new.
  • Select the Services option from the panel of Product and Services.
  • Mention the Bounced check in the Name field.
  • Further, choose the bank account in the Account field.
  • Click on the Save and New button to Create Another item.
  • Now name the Second service as the Bounced Check Fees and add the new account.
  • Or you can also select the Expense Account for tracking the Charges of a Bounced Check.
  • When you are done, click on Save and Close button.

Step 3: Create the Invoice for Bounced Check NSF Fees

  • In the Navigation Panel, click on the New button that is + sign.
  • In the customers, click on the Invoice option.
  • Mention the name of the Customer and also the Invoice Date on which it is created.
  • From the field Product and Services, click on the Bounced Check Fees that you just created before.
  • Now do mention the Description for the Bounced Check.
  • Enter the amount that you want to charge from the customer in the Amount field.
  • Click on the Save and Close button when you are done.

Step 4: Enter the Bank NSF (Non-Sufficient Fund) Fees as the Expense

  • In QuickBooks left panel, Click on the New option.
  • Go to the Vendors and then further click on Expenses.
  • Choose the Bank Account of which the check was bounced.
  • In the field of Payment Date, Mention the Date when the check was bounced.
  • In the field of Ref No. mention the Bank NSF Fees.
  • In the Account Details, Click on the Bank that you used to track the Bank Charges.
  • Enter the Bank NSF Fee in the Amount field.
  • Hit on Save and Close button to save it and close this window.

Step 5: Print and Send Statement to the customer

  • Open the Sales and Invoicing from the QuickBooks left side panel.
  • Now choose the Name of the Customer who sends this bounced check to you from the Customer tab.
  • You get the Transaction List open in front of you.
  • From the New Transaction, click on the Statement.
  • In the window of Create Statement, Choose the type of this statement, start date, and the end date of the statement also.
  • When you are done by Reviewing it.
  • Click on Save and Send button.
  • You have to choose the Email and send it to the Customer.

How to Record a Returned or Bounced Check Using an Expense?

Here are the steps to record a bounced check using an expense:

Step 1: Add the Bounced Check as Expense

  • Choose + New.
  • Choose Expense.
  • In the given Payee field, choose the name of the client who has experienced a bounced check.
  • From the dropdown of Payment Account, Choose the account the fund was scheduled to go into.
  • In the particular Payment date field, Add the date when the check bounced.
  • Choose and open the dropdown for Category Details.
  • In the particular Category field, choose Accounts Receivable.
  • In the particular Amount field, add the amount of the bounced check.
  • In the field for Description, add a note like NSF check or bounced check.
  • When it is completed, Choose Save and Close.

Step 2: From the Actual Invoice, Unapply the Bounced Check Payment

In this step, the bounced check entry is changed and the original invoice is prepared again.

  • Navigate to the option, Get paid and Pay. Now choose Customers.
  • Find and choose the name of the client whose check just bounced.
  • Locate and choose the bounced check record.
  • In the screen for Received Payment, Choose and uncheck the box for the actual invoice with which the bad check was connected.
  • Choose the checkbox for the particular expense. Add the bounced check as an expense.
  • Press Save and Close.

Step 3: Prepare an Item for the Bounced Check Charges from your Particular Bank

Now prepare a service item for all the fees and bounced checks. It will allow you to add them to your invoices that you can send to your clients later.

  • Navigate to Settings.
  • In the Lists section, Choose Products and services.
  • Choose New.
  • In the provided Product/Service information option, choose Service.
  • In the provided Name field, add Bounced Check.
  • From the particular Income account dropdown list, choose the specific bank account from which the check was returned on.
  • Choose Save and new.
  • Provide a name for the second item as Bounced Check fee.
  • In the Income account dropdown list, choose an income account called Bounced Check Fees.
  • Choose Save and close.

Step 4: Add the Particular Service Fee Charged by the Bank

Just because the bank charged you, it is imperative that you register the expense for your particular accounts.

  • Choose + New.
  • In the Vendors section, choose Expense.
  • From the given Payment account dropdown list, choose your bank.
  • In the provided Payment date field, add the date when the check was bounced.
  • Add the NSF fee in the given reference number field.
  • In the Category details section, choose the Bank Charges expense account from the provided dropdown list.
  • Add the amount that your bank has charged you for the submitted bounced check in the provided Amount column.
  • Press Save and Close.

Step 5: Make an Invoice for the Bounced Check and Send it to the Respective Customer

  • Choose + New.
  • In the Customer option, Select Invoice.
  • Choose the Customer name and add the date the check was bounced in the field for Invoice Date.
  • In the given product/Service column, choose the Bounced check fee item that has been prepared from the dropdown options.
  • Add the Amount that needs to be charged to the customer for providing the bounced check. Inform the client what the charge is all about and why it is levied.
  • Choose Save and Close.

Step 6: Send Statements to Your Clients

Lastly, Send a statement to your customer. It will be provided as:

  • Navigate to Get Paid and Pay or Sales. Now choose Customers.
  • On the given Customer’s tab, chose the name of the customer by whom the bounced check has been issued in order to open the Transaction List.
  • Choose Statement from the provided New transaction dropdown list.
  • Choose the Statement Type to prepare from the provided dropdown list.
  • Choose the Statement Date, Start Date, along with the End Date.
  • See the Description column. You’ll note your note concerning the second invoice.
  • Choose Print to issue a statement copy.

What to Do If You Have a Check Returned?

It is important to take immediate action if you wrote a bad check.

  1. Make a Deposit to Cover the Payment and Any Bank Fees: Bounced checks can be resubmitted by merchants for payment multiple times. If the merchant decides to resubmit the check, put money into your account to cover the cost. Additionally, you will need to have enough money in the account to cover any bank fees that might arise.
  2. Communicate with the Payee: You should be able to inform the payee that a deposit has been made to cover the returned check and any associated fees. Alternatively, if you can’t pay right away, you might be able to work out a payment schedule with the payee. Either way, it is important to get in touch with the recipient to lessen the negative impact of a bounced check.
  3. Address Bank Fees: Banks have the authority to deduct fees from your account. However, you can request a charge waiver from your bank. However, if you have a solid history with your financial institution, it might make an exception even if it is not required to let you off the hook. If you don’t ask, you will never find out.

What Should You Do If You Receive a Bad Check?

The returned check might be a genuine mistake, in which case it should be simple to resolve. However, the law is typically on your side if you can’t get paid. If you receive a bad check, the following steps may be able to help you get your money back.

  • Contact the Check Writer: On the check, look for a phone number and the current address. Next, get in touch with the person who wrote the check and request payment as promised. You might be able to resolve the issue over the phone. However, if that doesn’t work and you believe that things will wind up in court, you might need to send a letter requesting payment since some states call for you to do so when a check bounces.
  • Try Depositing the Check Again: If the check has bounced, determine if it is secure to deposit it again. Moreover, you might get in touch with the bank on which the check is drawn to inquire whether money has been added to the account to cover the payment.
  • Seek Legal Action: You might need to take the person who wrote the check if you haven’t received payment yet. By state or local law, the procedure differs. You might be able to file a lawsuit right away in some states for the amount of the check. Alternatively, if you’re also seeking damages, you might need to write a letter before filing a lawsuit. There may also be a choice to file a criminal complaint.

What Are The Risks of Writing Bad Checks?

If you write checks that are eventually returned, whether on purpose or not, you are asking for trouble. A few problems you will face are:

  • If you are the issuer, you’ll pay NSF fees, and if you are the recipient, you will pay returned check fees.
  • Your bank might close your account, and as a result, other banks might refuse to work with you.
  • If a faulty check causes a late payment, your credit may eventually suffer, making it more challenging for you to borrow money (or find employment or insurance) 10.
  • It will be more challenging to open new accounts and write checks in the future if you end up in the deadbeat databases used by banks and retailers.
  • Since it’s against the law to purposefully write bad checks, you could go into legal problems.

Know The Tips to Avoid Bouncing Checks

There may not be anything you can do about a check that has already bounced other than make up the payment, but there are steps you can take to stop it from happening again.

  • Balance Your Account: Monitoring your bank account to keep an eye on deposits, fees, automatic payments, debit card transactions, and other types of payments or withdrawals is the best way to prevent returned checks. To help customers in keeping track of their checking accounts, many banks provide online tools.
  • Avoid Post-dating Checks: Your state might allow post-dating, which is when you write a check for a future date when you expect funds in your account. But the Consumer Financial Protection Bureau states that banks and credit unions are not required to keep your check and can deposit it as soon as they get it. Therefore, it is a good idea to only write checks when you are certain that the money is in your account.
  • Keep a Cushion: Keeping track of the money entering and leaving your account can be challenging, and mistakes are bound to happen. Maintaining a reserve of funds in your account at all times is one way to avoid unexpected overdrafts.
  • Opt into Overdraft Protection: By choosing overdraft protection, You give the bank permission to pay for transactions even if they lower your balance below zero. For this service, the bank will often charge a fee, which typically costs $11. The bank will simply decline the transaction if overdraft protection is not present; the retailer may charge a fee for the bounced money.
  • Link Your Checking Account to Your Saving Account: By linking your accounts, Your bank will be able to access your savings account if your checking account is insufficient to cover a transaction. To link accounts, be aware that banks might charge a fee. And to make sure you don’t run out of money in either account, you will need to keep an eye on the balances of both accounts.

Here, you get to know how to record a returned check in QuickBooks. So you get to know all the different ways to record the returned checks. You have to go with the one way that you want to do according to your requirements.

Hopefully, after reading the above blog, your doubts related to return checks are solved. You may find all the instructions indicated in the blog referenced above. You can contact the support desk team if you continue to experience any problems with this.

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Frequently Asked Questions (Faqs)

How can I Print the Statement to send it to the Customer after Recording Bounced Check in QuickBooks?

  • In QuickBooks, click on Sales or Invoicing from the left menu.
  • Go to the Customers tab.
  • Choose the name of the customer who gives the bounced check. This opens the Transactions List.
  • Create the service items for bounced checks and fees that used in recording the charges.
  • You have to choose the Statement Type.
  • Set the Statement Date, Start Date, and also the End Date.
  • Tick mark the recipient’s name checkbox.
  • Click on the Print button to make a copy of this statement.
  • You can also click on Save and Send button to create the email to send it to the customer.

How can I apply to a new Invoice after Receiving the Customer’s Payment in the Process of Recording Bounced Checks in QuickBooks?

  • Click on the New button that is shown as + sign.
  • In the Customers option, choose the Receive Payment.
  • Further, Click on the Customer field drop-down menu to select the customer.
  • Mention the payment method and the payment date for this new payment.
  • Click on the Deposit to the field to mention the account for a deposit from the drop-down menu.
  • Mention the received Amount.
  • Click on the invoice that you have created from the list of Outstanding Transactions.
  • In the end, Click on Save and Close button.

If I already set up the item before then do I have to set it up again while doing the Process above to Record Bounced Checks in QuickBooks?

No, you do not have to set up item again if you have already created it before. Then you have to skip this step and move forward to another step. But if you have not created it before then do create it with the mentioned steps to get it done easily.

How Can You Manually Record Bounced Checks?

To manually record bounced checks, follow the steps below.

  • You have to create an income account, following which you have to create a Bad Check Charge item. Next, You have type Other Charge
  • Choose “Make General Journal Entries” from the “Company Menu”. Then you have to debit the account receivables for the NSF Check. After entering a note in the Memo, choose the name of the job and customer and credit the bank account or checking. Finally, Select “Save & Close”.
  • Choose Customers Receivables, then Customer Balance Detail, from the Reports menu. Double-click the NSF transaction’s initial payment line. Move the checkmark from the invoice to the reversal journal entry in the Receive Payments window. Select the Save & Close option.
  • You have to resend the open invoice.

How to Avoid getting Bad Checks?

You can ask for payment to be made with a cashier’s check, certified check, or money order if you want to make sure you won’t be paid with a bad check. In order to ensure that they are fully covered by funds, these must either be paid in advance or verified by the bank issuing them.

What is the Returned Check Fee?

Usually, the returned check fee ranges from $20 to $40. This is the cost imposed by the business or lender to whom you made the check. To recover some of the costs associated with trying to deposit your bad check, there is a fee.

What is a Returned Check Called?

A check that cannot be cashed due to insufficient funds (NSF) in the account is referred to as a bounced check. Instead of honoring these checks, often known as rubber checks, banks return them, and the check writers are assessed for NSF.

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